Approach Capital Improvement Projects with Caution!

You might be asking, why should our community association approach HOA Capital Improvement Projects with Caution? Your HOA is tasked with the important work of maintaining property values—not just for individual homeowners, but throughout the community. What this means is that the HOA Board has to make some big decisions, and put some real work into improving the grounds—common areas that might include parks, fields, gardens, a pool area, tennis courts, clubhouses, sidewalks, and beyond.

Attending to these common areas will sometimes require an investment of time and money; you may find, for instance, that there is a need to replace the roof on your clubhouse, to revamp the landscaping, to build a new gazebo, to add a new parking area, or something else. As a member of the HOA Board, you should certainly be aware of the need for these capital improvement projects, but you shouldn’t rush into them without first exercising the proper precautions.

First of all, it is important to consider how much money you can spend on a capital improvement project without owner approval. Different states have different laws and different communities have different stipulations in their governing documents—but more likely than not, there’s a dollar amount at which you’ll need to put it to a vote and get homeowner approval. Make sure you know what that amount is, and plan accordingly for your capital improvement project.

For that matter, it’s worth noting that different states and different association governing documents will define a capital improvement project differently. In some cases, major repair work might fall under the “capital improvement” umbrella, but there are some communities in which that term really specifies new constructions. Meanwhile, something like new siding for the clubhouse might technically be qualified as an “upgrade”—but that’s something you’ll have to check in your own governing documents.

Above all, though, make sure to emphasize communication with homeowners—even if you don’t technically need their permission to do something. Making the work of the HOA clear and transparent is a great way to ensure the ongoing support of the broader community.

Hopefully you have a better grasp of why your board should Approach HOA Capital Improvement Projects with Caution. Not only is there financial liability risk but also risk of upsetting your neighbors.